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December 2016

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In a major decision, the BJP-led Maharashtra government has decided to provide subsidy to textile owners and it would not be linked to bank loans. This comes as a major reprieve for a majority of powerloom owners in the state, who are Muslims and could not avail the subsidy and modernise their units as they consider usury and bank loans as un Islamic.

In a policy decision taken last week, the state government has decided to provide capital subsidy which would be delinked from bank loans. Spinning mills, cotton ginning, processing and printing units would be given 35 per cent capital subsidy; technical textiles and composite units 30 per cent; and power loom and other textile-related units 25 per cent. Power loom owners from the cotton belts of north Maharasthra, Marathwada and Vidarbha would be eligible for a further 10 per cent capital subsidy.

Subsidy for the textile industry was earlier credit-linked and only those who availed a bank loan were eligible for getting the government largesse, according to a newspaper report.

Of the nearly 24 lakhs powerlooms in the country, nearly half are in Maharashtra with Bhiwandi (8 lakh), Malegaon (2 lakh) and Dhule (10,000), accounting for over 80 per cent of Maharashtra's share. Almost 90 per cent of their owners and workers are Muslims.

Over the past 14 years, the Centre has spent a whopping Rs 75,000 crore under various phases of the Textile Upgradation Fund Scheme (TUFS) to bring India's textile industry on par with global standards. The scheme was meant to provide subsidy for modernisation and technology upgradation of all sectors in this industry, including spinning, weaving and garments. The state also provides a certain component as subsidy, but almost all government aid is linked to the clause that a powerloom owner needs to take a bank loan. (SH)